Air Canada, Sirius XM Radio bring deals; gold, oil names on the rise; Caesars' debt weakens

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., Sept. 19 - Four issuers priced $2.05 billion in a combined five tranches of dollar-denominated junk on Thursday.

Among them, Air Canada priced its $992 million equivalent of notes in three tranches, and Sirius XM Radio upsized its seven-year notes to $650 million.

Dell Inc. added a €500 million minimum term loan B to its acquisition financing on Thursday, market sources said, which is expected to decrease the amount of high-yield notes Dell is selling. Earlier in the week, Dell announced a $3.25 billion two-part offering of secured notes.

In Thursday trading, there were "not too many losers," a high-yield bond trader reported.

The new-issue market also remained active in the wake of the Federal Reserve announcement on Wednesday that it will delay tapering its stimulus program.

But new issues were not the only ones benefitting from the news. One trader noted that gold names - specifically, AngloGold Ashanti Holdings plc, though he said it was all across the sector - got a boost.

For its part, gold was up more than 4% on the day.

In other commodity-based names, oil- and energy-related credits also firmed up for the most part.

Meanwhile, Caesars Entertainment Corp. debt was weaker one day after the company said it intended to launch a plan that would refinance $4.5 billion of debt.

Recently priced deals continued to perform well. SLM Corp.'s $1.25 billion of 5½% notes due 2019, for instance, increased about half a point to par 5/8, according to a trader. The deal priced Tuesday at 98.877 to yield 5.75%.

Air Canada prices

Air Canada priced $992 million equivalent of senior secured notes in three tranches.

A $400 million tranche of six-year senior first-lien notes (B2/B+) priced at par to yield 6¾%, at the tight end of the 6¾% to 7% yield talk.

A C$300 million tranche of six-year senior first-lien notes (B2/B+) priced at par to yield 7 5/8%, in the middle of the 7½% to 7¾% yield talk.

A $300 million tranche of 6.5-year senior second-lien notes (Caa2/CCC+) priced at par to yield 8¾%, at the tight end of the 8¾% to 9% yield talk.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and TD Securities are the joint bookrunners for the dollar-denominated tranches.

TD Securities was the lead bookrunner in a syndicate comprised of the same banks for the Canadian dollar-denominated tranche.

The Montreal-based issuer, Canada's largest airline, plans to use all of the proceeds to fund the tender offer for its $600 million of its 9¼% senior notes due 2015, C$300 million 10 1/8% senior secured notes due 2015 and 12% senior secured second-lien notes due 2016, with any remaining proceeds for general corporate purposes.

The $400 million first-lien tranche was added to the transaction earlier in the week, while the bank loan was downsized by $400 million.

Sirius upsizes drive-by

Sirius XM Radio priced an upsized $650 million issue of seven-year senior notes (B1/BB) at par to yield 5 7/8%.

The quick-to-market issue was upsized from $600 million.

The yield printed at the tight end of yield talk set in the 6% area.

JPMorgan, Deutsche Bank Securities Inc., Morgan Stanley, BofA Merrill Lynch, Barclays, Citigroup and RBC Capital Markets were the joint bookrunners.

The New York-based satellite radio broadcaster plans to use the proceeds, together with cash on hand, to redeem its outstanding 7 5/8% senior notes due 2018.

Walter Energy secured deal

Walter Energy, Inc. priced an upsized $450 million issue of 9½% six-year senior secured notes (B3/B) at 99.425 to yield 9 5/8%.

The quick-to-market deal was upsized from $350 million.

The yield printed in the middle of the 9½% to 9¾% yield talk.

Morgan Stanley, BMO Capital Markets, Barclays, BofA Merrill Lynch, Citigroup, Credit Agricole CIB, Goldman Sachs & Co., JPMorgan and Scotia Capital were the joint bookrunners.

Proceeds will be used to repurchase up to $175 million of the company's term loan A via a Dutch auction and for general corporate purposes. The additional proceeds resulting from the upsizing of the issue will be used to repurchase $250 million of the company's term loan A and for general corporate purposes.

GEO's debt refinancing

GEO Group, Inc. priced a $250 million issue of senior notes due Jan. 15, 2022 (B1/B+) at par to yield 5 7/8%.

The yield printed at the wide end of the 5¾% to 5 7/8% yield talk.

Wells Fargo Securities LLC was the left bookrunner. SunTrust Robinson Humphrey, BofA Merrill Lynch, Barclays, JPMorgan and BNP Paribas are the joint bookrunners.

The Boca Raton, Fla.-based correctional facilities-focused real estate investment trust plans to use the proceeds to take out its 7¾% senior notes.

Jerrold sets price talk

Jerrold Holding Ltd. plans to sell £200 million of five-year senior secured notes (B+) with a yield in the 9 7/8% area.

Books close Friday at noon U.K. for accounts in Europe and the United Kingdom and 8 a.m. ET for accounts in the United States.

RBS Securities Inc., Jefferies Group and Lloyds TSB are leading the deal.

The Cheshire, England-based mortgage lender plans to use the proceeds to refinance debt.

Hapag-Lloyd plans €200 million

Germany-based Hapag-Lloyd AG disclosed plans to sell €200 million of five-year senior notes (Caa1/B-/).

Deutsche Bank AG, Citigroup and JPMorgan are the joint bookrunners for the Rule 144A and Regulation S offer. Berenberg, IKB, MM Warburg and Morgan Stanley are the co-managers.

The shipping firm plans to use the proceeds to refinance debt and for general corporate purposes.

Commodity sectors rise

A trader said that gold bonds and stocks "seemed to shoot up yesterday after the Fed." He added that the trend continued into Thursday's session.

In particular, he said that AngloGold's 8½% notes due 2020 were better by more than 2½ points, ending the day around 104.

Gold increased by $57.50, or 4.4%, to $1,365.10.

The oil and energy sector was also firming up. Rosetta Resources Inc.'s 5 5/8% notes due 2021 put on more than half a point to close at 96 1/8, and Continental Resources Inc.'s 5% notes due 2022 inched up to par 5/8.

Oil ended the day down $1.53, or 1.43%, at $105.75.

Specialty chemical companies were also on the rise. A trader saw Ashland Inc.'s 4¾% notes due 2022 up almost a point at 951/2.

However, Rockwood Specialties Group Inc.'s 4 5/8% notes due 2020 were "virtually unchanged" at par 5/8.

Caesars loses ground

Caesars Entertainment's bonds were weaker Thursday, the day after the company said it was working on a plan to refinance $4.85 billion of debt.

A trader said the 10% notes due 2018 fell more than 2½ points to 58 5/8, while the 10¾% notes due 2016 dropped half a point to 911/2.

On Wednesday, the Las Vegas-based casino operator announced that it intended to take out about $4.4 billion of CMBS debt as well as a $450 million senior secured credit facility entered into by Octavius Linq Holding Co. LLC with new financing. The new debt includes a $3.26 billion senior secured credit facility - comprised of a $3 billion term loan and a $269.5 million revolver - along with $500 million of first-lien notes and $1.35 billion of second-lien notes, the company said in an 8-K filed with the Securities and Exchange Commission.

A bank meeting for the new Citigroup Global Markets Inc.-led credit facility was scheduled for Thursday.

Verso debt dips

Verso Paper Corp.'s debt dipped in Thursday trading, though there was no real news, only rumors, out on the company.

One trader said the 11¾% notes due 2019 lost half a point to end around 68. Another quoted the issue at 67½ bid, 68½ offered.

The second trader also saw the 11 3/8% notes due 2016 in a 47 to 48 context.

The Bangor Daily News in Maine said Thursday that it received an anonymous phone call stating that the Memphis-based papermaker was threatening to file for bankruptcy if the union organized at one Maine mill did not agree to shoulder a larger portion of health-care costs.

The article quoted a spokesperson as stating that the rumor was false. In fact, if it were true, it would be illegal, the article pointed out.

Market indexes mixed

The KDP High Yield Daily index jumped Thursday as its yield tightened.

The index moved up to 73.97, while the yield came in to 6.02%. That compared to Wednesday's reading of 73.75 with a yield of 6.14%.

The CDX North American High Yield index fell to 106 13/32 bid, 106 17/32 offered.

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